At Cop28 last December, France’s former minister for the energy transition, Agnès Pannier-Runacher, announced she was “very happy” to support a Dutch initiative to remove subsidies for fossil fuels.
“Leading by example is obviously a key way to move forward and to show that the solutions are under our eyes,” she told a press conference, alongside ministers from Canada, Spain and other – mainly European – governments.
But, just two months later, in efforts to placate protesting farmers, her government U-turned on plans to remove subsidies for the fossil fuels that power agricultural machinery like tractors.
And the political fallout of the decision could reverberate beyond France’s borders, Sussex University international relations professor Peter Newell told Climate Home.
“It doesn’t send a good signal about these commitments if, at the first sign of trouble, richer countries relent for short-term, narrow electoral reasons,” he said.
The then French environment minister (second from left) posing for pictures after joining an initiative to end fossil fuel subsidies
The G20 group of big economies has been promising to phase out “inefficient” fossil fuel subsidies since 2009, but to little effect. Globally, explicit subsidies – undercharging for the supply costs of fossil fuels – more than doubled to $1.3 trillion in 2022, according to International Monetary Fund figures.
Bad example
Newell warned that France’s move “sends a signal that it’s okay to capitulate in the face of social pressure when it comes to difficult choices around fossil fuel subsidy reform”.
It could spur on other groups to push back against similar reforms, he said. Farmers in Germany and Lithuania are also currently fighting plans to remove their fuel subsidies.
A team of researchers found that between 2005 and 2018, 41 countries had at least one riot associated with popular demand for fuel. Their study concluded that the removal of subsidies had often led to social unrest. In France in 2018, for example, the rising cost of driving sparked a wave of protests by the gilets jaunes (yellow vest) movement, leading to a rollback of fuel tax hikes.
French farm machinery produces about ten million tonnes of carbon dioxide equivalent a year, which is just over a tenth of France’s farming’s emissions, according to a recent analysis by the French government’s official climate advisers (HCC).
About half of French agricultural emissions come from cows releasing methane through burps. Just over a tenth is from fossil fuel-based fertilisers, with smaller amounts from pigs, sheep and other sources.
French farmers currently receive an annual €1.7-billion ($1.8-bn) taxpayer subsidy to make the diesel that runs their machinery cheaper.
The HCC analysis says that about a tenth of farm machinery’s carbon pollution can be stopped through driving in a way that uses less fuel and engine maintenance.
To reduce emissions further, it recommends tractors should be converted to biodiesel or electric engines “as soon as possible to avoid the risks of lock-in” given that many tractors bought today will still be in use as France gets close to its deadline of reaching net-zero emissions in 2050.
Just transition
Stéphane De Cara, director of research at the French agricultural research institute INRAE, sees the failure to address this “low-hanging fruit” as a clear signal that France is “not moving in the right direction” when it comes to emissions targets.
But, he said, if the fuel subsidy were to be scrapped, then the money saved should be channeled back to poorer farmers so that they can invest in greener technology.
Since Cop28, Pannier-Runacher has been appointed to France’s agriculture ministry and put in charge of ecological planning, energy issues and the production of biomass. She has vowed to devote all her energy to “farmers and food sovereignty”.
Ahead of European elections in May, farmers’ protests have been dominating headlines across Europe, pushing their grievances over foreign competition and falling incomes, coupled with rising costs, up the political agenda. Some farmers have targeted climate and nature policies at the national and European Union levels.
According to Newell, right-wing political parties are using the issue as a “lightning rod for broader social discontent” as part of a “weaponisation” of climate policy across Europe ahead of June’s EU elections.
Farming is the “new battle line in discussions around just transitions”, the researcher added.
The post Despite Cop28 pledge, France keeps fossil fuel subsidies for farmers appeared first on Climate Home News.
Despite Cop28 pledge, France keeps fossil fuel subsidies for farmers
With the U.S. bombing Iran and the Strait of Hormuz closed, energy experts say countries transitioning to renewables will be more resilient in the “face of the shock.”
The United States’ war on Iran could fundamentally alter how countries consume and generate energy and hamper international progress in combating climate change, a panel of energy experts said today.
The Global Energy Supply in a Decade ‘Is Not a World We’re Going to Recognize’
One month into the US and Israel’s war on Iran, at least 60 countries have taken emergency measures in response to the subsequent global energy crisis, according to analysis by Carbon Brief.
So far, these countries have announced nearly 200 policies to save fuel, support consumers and boost domestic energy supplies.
Carbon Brief has drawn on tracking by the International Energy Agency (IEA) and other sources to assess the global policy response, just as a temporary ceasefire is declared.
Since the start of the war in late February, both sides have bombed vital energy infrastructure across the region as Iran has blocked the Strait of Hormuz – a key waterway through which around a fifth of global oil and liquified natural gas (LNG) trade passes.
This has made it impossible to export the usual volumes of fossil fuels from the region and, as a result, sent prices soaring.
Around 30 nations, from Norway to Zambia, have cut fuel taxes to help people struggling with rising costs, making this by far the most common domestic policy response to the crisis.
Some countries have stressed the need to boost domestic renewable-energy construction, while others – including Japan, Italy and South Korea – have opted to lean more on coal, at least in the short term.
The most wide-ranging responses have been in Asia, where countries that rely heavily on fossil fuels from the Middle East have implemented driving bans, fuel rationing and school closures in order to reduce demand.
‘Largest disruption’
On 28 February, the US and Israel launched a surprise attack on Iran, triggering conflict across the Middle East and sending shockwaves around the world.
There have been numerous assaults on energy infrastructure, including an Iranian attack on the world’s largest LNG facility in Qatar and an Israeli bombing of Iran’s gas sites.
Iran’s blockade of the Strait of Hormuz, a chokepoint in the Persian Gulf, is causing what the IEA has called the “largest supply disruption in the history of the global oil market”.
A fifth of the world’s oil and LNG is normally shipped through this region, with 90% of those supplies going to destinations in Asia. Without these supplies, fuel prices have surged.
Governments around the world have taken emergency actions in response to this new energy crisis, shielding their citizens from price spikes, conserving energy where possible and considering longer-term energy policies.
Even with a two-week ceasefire announced, the energy crisis is expected to continue, given the extensive damage to infrastructure and continuing uncertainties.
Asian crunch
Carbon Brief has used tracking by the IEA, news reports, government announcements and internal monitoring by the thinktank E3G to assess the range of national responses to the energy crisis roughly one month into the Iran war.
In total, Carbon Brief has identified 185 relevant policies, announcements and campaigns from 60 national governments.
As the map below shows, these measures are concentrated in east and south Asia. These regions are facing the most extreme disruption, largely due to their reliance on oil and gas supplies from the Middle East.
Nations including Indonesia, Japan, South Korea and India are already spending billions of dollars on fuel subsidies to protect people from rising costs.
At least 16 Asian countries are also taking drastic measures to reduce fuel consumption. For example, the Philippines has declared a “state of national emergency”, which includes limiting air conditioning in public buildings and subsidising public transport.
Other examples from the region include the government in Bangladesh asking the public and businesses to avoid unnecessary lighting, Pakistan reducing the speed limit on highways and Laos encouraging people to work from home.
Europe – which was hit hard by the 2022 energy crisis due to its reliance on Russian gas – is less immediately exposed to the current crisis than Asia. However, many nations are still heavily reliant on gas, including supplies from Qatar.
The continent is already feeling the effects of higher global energy prices as countries compete for more limited resources.
At least 18 European nations have introduced measures to help people with rising costs. Spain, which is relatively insulated from the crisis due to the high share of renewables in its electricity supply, nevertheless announced a €5bn aid package, with at least six measures to support consumers.
Many African countries, while also less reliant on direct fossil-fuel supplies via the Strait of Hormuz than Asia, are still facing the strain of higher import bills. Some, including Ethiopia, Kenya and Zambia, are also facing severe fuel shortages.
There have been fewer new policies across the Americas, which have been comparatively insulated from the energy crisis so far. One outlier is Chile, which is among the region’s biggest fuel importers and is, therefore, more exposed to global price increases.
Tax cuts
The most common types of policy response to the energy crisis so far have been efforts to protect people and businesses from the surge in fuel prices.
At least 28 nations, including Italy, Brazil and Australia, have introduced a total of 31 measures to cut taxes – and, therefore, prices – on fuel.
Even across Africa, where state revenues are already stretched, some nations – including Namibia and South Africa – are cutting fuel levies in a bid to stabilise prices.
Another 17 countries, including Mexico and Poland, have directly capped the price of fuel. Others, such as France and the UK, have opted for more targeted fuel subsidies, designed to support specific vulnerable groups and industries.
These measures are all shown in the dark blue “consumer support” bars in the chart below.
Such measures can directly help consumers, but some leaders, NGOs and financial experts have noted that there is also the risk of them driving inflation and reinforcing reliance on the existing fossil fuel-based system.
Christine Lagarde, president of the European Central Bank, spoke in favour of short-term measures to “smooth the shock”, but noted that “broad-based and open-ended measures may add excessively to demand”.
Measures to conserve energy, of the type that many developing countries in Asia have implemented extensively, have been described by the IEA as “more effective and fiscally sustainable than broad-based subsidies”.
So far, there have been at least 23 such measures introduced to limit the use of transport, particularly private cars.
These include Lithuania cutting train fares, two Australian states making public transport free and Myanmar and South Korea asking people to only drive their cars on certain days.
Clean vs coal
At least eight countries have announced plans to either increase their use of coal or review existing plans to transition away from coal, according to Carbon Brief’s analysis. These include Japan, South Korea, Bangladesh, the Philippines, Thailand, Pakistan, Germany and Italy.
These measures broadly involve delaying coal-plant closure, as in Italy, or allowing older sites to operate at higher rates, as in Japan – rather than building more coal plants.
There has been extensive coverage of how the energy crisis is “driving Asia back to coal”. However, as Bloomberg columnist David Fickling has noted, this shift is relatively small and likely to be offset by a move to cheap solar power in the longer term.
Indeed, some countries have begun to consider changes to the way they use energy going forward, amid a crisis driven by the spiralling costs of fossil-fuel imports.
Leaders in India, Barbados and the UK have explicitly stressed the importance of a structural shift to using clean power. Governments in France and the Philippines are among those linking new renewable-energy announcements with the unfolding crisis.
New renewable-energy capacity will take time to come online, albeit substantially less time than developing new fossil-fuel generation. In the meantime, some nations are also taking short-term measures to make their road transport less reliant on fossil fuels.
For example, the Chilean government has enabled taxi drivers to access preferential credit for purchasing electric vehicles (EVs). Cambodia has cut import taxes on EVs and Laos has lowered excise taxes on them.
Finally, there have been some signs that countries are reconsidering their future exposure to imported fossil fuels, given the current economics of oil and gas.
The New Zealand government has indicated that a plan to build a new LNG terminal by 2027 now faces uncertainty. Reuters reported that Vietnamese conglomerate Vingroup has told the government it wanted to abandon a plan to build a new LNG-fired power plant in Vietnam, in favour of renewables.
The post Iran war analysis: How 60 nations have responded to the global energy crisis appeared first on Carbon Brief.
Iran war analysis: How 60 nations have responded to the global energy crisis
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